‘Gains’, ‘Losses’, & Real Value

Political analysts and media commentators have made it their business to assess every party manifesto commitment, policy proposal, and budget initiative by setting out who will gain/lose by how much financially. So we are told on some proposal, young couples with no children will ‘gain’ X £ or $, while those aged 70+ with nothing but a state pension will ‘lose’ Y, etc. On other proposals, there will be different ‘gains’ and ‘losses’ calculated for a variety of demographically defined groups.

But why should we accept this approach at all?

Imagine a woman went into a shop to return a product which did not work to her satisfaction and got a refund of £100, while a man paid £100 for a similar product that did the job he needed it to do. Do we say that the launch of that product has left the woman £100 better off, and the man £100 worse off? Of course not. We cannot ignore what is of real value here. The man has paid £100 for something which meets a need, and if pressed to quantify it in crude monetary terms, he might say that it was worth more than a £100. By contrast, the woman has had to waste her time with a product that didn’t do what she wanted it to do, and she has gained nothing at all.

So much of contemporary assessment of public services makes exactly this mistake of ignoring real value. People pay their respective share into the public pot because it then provides the collective resources to fund services and secure outcomes that cannot otherwise be achieved. Isolated individuals with no taxes to pay would not be able to buy into a comprehensive health service, an impartial judicial system, policing and security at all levels, education for children and inspection of care quality for the elderly, and countless other benefits. Without the guaranteed organisation provided by the government, maximum profit will be squeezed out of those who can afford to pay the charges demanded for some of these provisions, while the rest will be left with no support at all.

Instead of quantifying the impact of public policies in warped monetary terms, commentators should learn to describe them in terms of lives saved, protected, improved, and enhanced. If they were incapable of doing that except where they could calculate some monetary equivalent, they could undertake projections of how much it would otherwise have cost to secure similar outcomes without public bodies delivering them. What profit-making doctors, commercial security firms, or private educational facilities would charge in the absence of public services would then provide a financial yardstick, albeit a crude one, of how much value we derive from our public providers.

Ironically, such value is not counted as part of the wealth of a nation unless the provider is in the private sector. For example, a public service doctor saves a life in a public hospital would be chalked up as a ‘loss’ of thousands of pounds. But a private sector doctor doing the same for a patient who covers part of the bill with commercial health insurance and part with dwindling family savings would be classified as a ‘gain’ for the economy.

If we are to value our public services, we must brush aside crass conceptions of ‘gains’ and ‘losses’, and start focusing on what is of real value in our lives.